Norway's May retail sales and household consumption stronger than expected, trend growth still low

In a report, Statistics Norway said that Norwegian Retail Sales rose to a seasonally adjusted annual rate of 1.7 percent in May, from 0.0 percent in the preceding month. Data beat analysts' expectation for a 0.5 percent rise last month. Trend growth is now -0.9 percent q/q annualised.

The index of households consumption of goods rose 0.8 percent m/m in May, after falling the previous three months. Trend growth is -0.7 percent q/q annualised. This index is the main indicator of private goods consumption in the national accounts.

Norges Bank projected in the report presented last week consumption growth to be 1.5 percent y/y in 2016. Retail sales and household consumption data was stronger than expected. That said, the monthly figures are volatile and the trend growth is still low.

“Today’s figures are no reason for Norges Bank to cancel the interest rate cut at the next policy meeting in September,” notes DNB Bank in a report.